The Company is pleased to report the successful flow rate of commercial volumes of gas with high condensate content during testing operations of Upper B18.

Following the completion and testing programme over the past 6 weeks, the Company has successfully installed the through tubing inflatable packer "TTIP" and the 202 well has been cleaning out the considerable volumes of water and nitrogen used during the installation process. The Company selected a small choke size for the initial test, at 4mm, to maintain downhole pressure during the clean out process and the well flowed at a calculated rate of 0.9mmscfgpd. During the test, bottom hole pressure was measured at 228.5 atmospheres and after a 24 hour shut in period the pressure increased to 348.3 atmospheres.

It is clear from the test that a fully stabilized flow rate has not yet been achieved as some nitrogen and fluid used during the TTIP installation is evident in the flow. The Company will now commence production tests on various choke sizes in order to thoroughly understand the reservoir and the production capability of the well prior to bringing it in to commercial production.

The production tests will provide a clear indication of recoverable reserves from this well and also provide a greater level of understanding about the longer term potential of the reservoir. Once the reserves around this well have been recovered the Company plans to remove the TTIP and commence production tests on the lower B18.

Sorochynska Gas Plant

The Company is making steady progress with the flow line installation. The current estimate for completion of the work and the commencement of production testing of the plant is mid-February. Subsequent to the successful connection of the 201 and 202 wells to the newly commissioned gas plant, which is located 8km from the 201 well head, the company expects enhanced production rates and significantly lower operating costs at its owned and operated plant.

CEO Comments:

"We are pleased to have completed these testing operations which were successfully executed to plan, albeit later than we had anticipated due to the requirement to source a packer from outside Ukraine. The initial indications from the 202 well are positive and we are encouraged by the flow rates achieved with these initial tests. The well will now undergo further testing operations in order to better understand the reservoir and the full potential of the well, ahead of its connection to the new gas plant and subsequent production.

Concurrently, we estimate that the new plant will be commissioned in mid-February. Assuming successful connection and production tests at the plant, Hawkley will see an uplift in its cash generation as it achieves combined production from both 201 and 202 and also benefits from the reduced production costs enabled by the new plant. We are excited about these positive developments and this step change in the Company’s profile and look forward to updating our shareholders on the further testing operations and commissioning of gas plant in due course".